Skip to content
  • KOSPI 3278.68 +20.05 +0.62%
  • KOSDAQ 998.49 +1.12 +0.11%
  • KOSPI200 436.96 +2.83 +0.65%
  • USD/KRW 1117.8 1.40 0.13%
  • JPY100/KRW 1,015.63 1.32 0.13%
  • EUR/KRW 1,355.5 2.31 0.17%
  • CNH/KRW 174.57 0.17 0.10%
View Market Snapshot

IPOs

Blackstone-invested handbag maker Simone applies for IPO review

The US private equity firm is expected to pocket trillions of won when Simone goes public in the second half

By Jun 11, 2021 (Gmt+09:00)

Blackstone-invested handbag maker Simone applies for IPO review

South Korea’s luxury handbag maker Simone Acc. Collection Ltd., 30% owned by US private equity firm Blackstone, has kicked off a process to list its shares on the Korea Exchange.

Simone said on Friday it has applied for a preliminary review by the stock market operator of its initial public offering, expected in the second half of this year.

Samsung Securities and Mirae Asset Securities are the lead managers of the IPO. Korea Investment & Securities is the co-underwriter.

If successful, the IPO will pave the way for global private equity company Blackstone to exit from its investment in the Korean handbag maker.

Simone’s enterprise value is estimated at some 2 trillion won ($1.8 billion), applying a price-to-earnings ratio of 20 times to its annual net income valued at around 100 billion won, according to industry officials.

In 2015, Blackstone invested $300 million to acquire a 30% stake in Simone. The value of its holdings will double with Simone’s estimated enterprise valuation of 2 trillion won.

The handbag maker posted an operating profit of 46.7 billion won on revenue of 621.8 billion won in 2020. In the first quarter of this year, it reported 17.6 billion won in operating profit on sales of 154.2 billion won.

As the global economy is recovering from the pandemic, rising consumer demand for luxury goods is expected to boost Simone’s earnings this year.

Simone Chairman Park Eun-kwan
Simone Chairman Park Eun-kwan

SECOND IPO ATTEMPT

Simone is the first original development manufacturer (ODM) in Asia to have tapped into the luxury handbag manufacturing market.

Established in 1987, Simone holds a comfortable lead in the global market. The company’s ODM business controls 10% of the global luxury handbag market and 30% of the US market.

Its annual handbag production capacity is 30 million units, the world’s largest. The company has produced about 360 million handbags since its launch.

In addition to US-based luxury brand Donna Karan New York (DKNY), the Korean company boasts a strong client portfolio of around 20 luxury brands globally, including Burberry, Marc Jacobs and Coach.

Blackstone-invested handbag maker Simone applies for IPO review

The company's profit largely comes from its ODM portion, which accounts for 70% of its total revenue. Simone has also been expanding its business by releasing its own brands such as the multi-purpose commercial venue, 0914.

The planned IPO marks Simone’s second attempt. Its previous bid to make a trading debut on the domestic market went awry in 2018 due to its weak business performance.

Since then, the company has gone through rigorous restructuring, selling off its stake in its Guangzhou entity at the end of 2019 and liquidating the Qingdao office in January 2020.

Write to Ye-jin Jun at ace@hankyung.com

In-Soo Nam edited this article.

Comment 0

0/300